The content is accurate at the time of publication and is subject to change.
Your credit history is a record of all the financial transactions that you have made ever since you started having a social security number. All your transactions will be linked to your SSN from the start. This record is maintained by the credit bureaus which give you a credit score which is an indicator of your financial credibility.
For people who are new to the country or for people who have been out of the country for a couple of years or most probably for kids just graduating out of school, building a credit history is a big issue. The faster one gets onto it the better. In order to have a credit history, the first step you need to take is to open couple of bank accounts. Once you open bank accounts, you start legitimizing your financial transactions. Every time you swipe your card, you make a record with the bank. But your credit score will really not be affected till you apply for a credit card. You can apply for one after you have been with a bank for a sufficient period of time. if you fail with that, you can try getting someone to co-sign for your credit account.
The next step to take is to start making transactions with that card. The more you swipe, the faster your credit record will grow. And make sure that you are capable of paying for your purchases before you go around making them in the first place. Defaulting on a payment is even worse than not having a credit history. It can permanently damage your reputation with all financial institutions and make it very difficult for you to get credit in the future.
After you do all this, the next step would be to go about taking loans or mortgages to pay for essentials like a car or a home. Make sure you have the ability to pay it off before going for a loan. Always make sure you pay your installments on time every time. Another thing to think about while taking a loan is that it could reduce the taxes that you pay on your income since all the payments you make towards a loan are tax free.
Having a bad credit history or no credit history is a very bad situation to be in. try to follow the steps as described above in order to set things right. With no credit history, you cannot own a credit card, you cannot get a loan, you cannot even get a loan for a vehicle or a home. Even getting an educational loan can get problematic when you don`t have a credit history. You need to be aware that your child`s education can suffer because of a few financial blunders on your side. Take the right steps now and you can ensure that you have secured your child`s future. Building on your credit record must be your top priority. If you do not have one, this is the time to start and if you have a bad credit record, it is never too late to set it right.
